TradeTech FX USA 2023: smartTrade’s John Stead explains competitive advantage
North America’s biggest FX gathering of the year took place on February 22-24 at The Diplomat Beach Resort in Florida, USA.
More than 600 executives – including key regulators, buy-side, sell-side, and technology vendors – attended the conference this year for the panel discussions, hands-on workshops, and to network.
FinanceFeeds was there covering the event. Editor-in-Chief Nikolai Isayev had the opportunity for a quick chat with John Stead, Pre-Sales and Marketing Director at smartTrade Technologies, the global provider of multi-asset electronic trading platforms for both regulated and un-regulated Financial Institutions.
Headquartered in Aix en Provence, France, smartTrade Technologies offers in-house hosted solutions support Foreign Exchange, Fixed Income, Crypto and Derivatives asset classes with connectivity to over 130 liquidity providers, enabling tailored aggregation, smart execution, risk management, order management, analytics, payments and multi-channel distribution.
John Stead has been with smartTrade for nearly ten years already. He knows the company and products inside out, which begs the question “what makes smartTrade standout from the competition?”
There are four key things, he said.
1) Clients: “We have great clients, both buy and, sell-side, they really help drive forward the product and give us confidence that we have something really market leading to offer”;
2) Our commercial model: “We strongly believe the market should be transparent, all fees should be upfront and known, and so for that reason we just charge technology fees – no hidden charges (no charging LPs, no dollars per million, etc.)”;
3) Product: “There are other providers that cover particular parts of the front office workflow – whether it’s aggregation, distribution, OMS etc. – Clients tell us we have the best end-to-end solution as well as competing very strongly on each specific part of the front office process. You can take liquidity from providers, aggregate it, you can trade straight back out if you’re on the buy side, if you have distribution flows you can create pricing, receive orders back in, internalize, automate, etc. It’s truly an amazing end to end solution.”
4) People: “Lastly but not least at all, we would be nothing if it was not for our very talented teams of developers, project managers, customer support and many others. After over 22 years in the business our collective knowledge of how to successfully, develop, implement and support complex trading platforms is second to none”.
As to the hot topic of market data, John Stead said there are no restrictions on where you get the data from. “unlike many other vendors we are not owned by an exchange, bank or others market participants”. That allows smartTrade to have a truly independent approach. For example, we have over 130 connectors for market data, both tradeable feeds and market data. Once again, one interest point is that “the data is clean. Prices are clean. “We don’t charge LPs”. That brings us back to smartTrade’s commercial model in which there are no hidden charges, just the technology fee. “There’s where we have a clear advantage”.
In the world of FX, unlike in other asset classes, market data is often offered by the partner bank or venue without any cost whatsoever.
The conversation then moved to smartTrade’s software solutions such as LiquidityFX, and whether it is more cost effective to focus on a pre-packaged solution or on building custom solutions.
“You should buy what’s commoditized and build your special sauce”, said John Stead, as he explained that smartTrade launched the Algobox precisely to that effect. “You buy the smartTrade LiquidityFX solution, which is out of the box and offers a ready to go solution. However If you want to add your special sauce above and beyond pricing, risk and liquidity adjustments then we’ve put a container that allows you to, for example, skew pricing based on inventory, Value at Risk (VaR), volatility indicators, etc. You can build it yourself, which frees you from dependency on our roadmap.”
Still, smartTrade can and does build the special sauce if asked and will use the same Algobox to deliver, Stead added.
smartTrade Technologies is a global company, with subsidiaries in London, Paris, Geneva, Istanbul, New York, Toronto, Tokyo, and Singapore. The firm historically has more clients in Europe, but is also now experiencing strong growth in Canada and the United States.
In addition to its geographical expansion and adding key new functionality, smartTrade does acquire companies from time to time. In late 2021, the firm acquired Toronto-based TickTrade in order to leverage its analytics and payments capabilities. John Stead praised TickTrade for being ahead of the curve in Machine Learning, AI, as well as payments.